MONTREAL — The Grand Prix is returning to Montreal which spells good news for local merchants who admit they felt the pinch when the glitzy race took off to Turkey last June.

Considered a cash cow for restaurateurs along the city’s famed Crescent Street party district, the week-long Formula One event was known for drawing a who’s who of glamorously trashy American and European tourists with cash to burn.

But the 2009 event was moved after the city refused to meet F1 boss Bernie Ecclestone’s price tag — $175 million over five years.

On Friday, federal, provincial and municipal officials announced they reached a deal to bring the Formula 1 back at the relative discount price of $75 million in public tax money.

The race will return to the Gilles-Villeneuve circuit next June 13 and every year after that until 2014.

“Today Formula One says ’yes’ to Montreal and Montreal says ’yes’ to Formula 1, but not at any price,” Mayor Gerald Tremblay said during a news conference.

“We wanted a world class event but we wanted that our investment respect the capacity to pay of our taxpayers.”

Under the deal, the federal government and Montreal’s tourism bureau will each kick in $25 million over five years, while the province will spend $20 million, and the municipal government will contribute $5 million.

In return, the city and its partners will receive a 30 per cent share from ticket sales. The event is expected to generate $18 million in federal and provincial tax revenue each year, overall economic spinoffs of $89 million and 75,000 overnight hotel stays.

“This is a win-win situation for the Quebec taxpayer, for the Canadian taxpayer,” Quebec Finance Minister Raymond Bachand said.

Few Montrealers blamed the city for losing the race which had been a mainstay since 1978. Despite the lost revenue, most merchants dismissed Ecclestone’s demands as being unreasonable.

Still, the Grand Prix’s absence, coupled with a rising Canadian dollar, a global economic crisis and lousy spring weather, took a nasty bite out of already slumping businesses.

It prompted some merchants to make concessions or even close their doors for good.

Ronnie Haq of Los Tios Tex-Mex Grill said his restaurant had to cut its prices by about 10 per cent. Meanwhile, summer revenues were down about 20 per cent.

“It hurt the business,” he said. “Definitely we’re looking forward to it coming back to Montreal. . . It’s going to benefit not just Crescent Street but the city as a whole and the province.”

Roger Costa of Weinstein and Gavino’s, another Crescent Street eatery, said the Grand Prix had long been the premier event to launch the summer season.

While business doubles that one week, he credits the widespread coverage of the international race for drawing tourists to Montreal and to his restaurant throughout the year.

Last year’s Grey Cup, the NHL hockey draft, and the 100th anniversary of the Montreal Canadiens helped soften the blow for bars and restaurants, but times were tougher for souvenir and specialty shops.

Gone is the F1 Emporium, a kitschy collectibles shop that owed 45 per cent of its annual earnings to the Grand Prix.

The black-and-white checkered border on the building’s facade remains but, inside, the windows are covered in brown paper and a sign indicates the property is up for grabs.

A man who answered the phone at Yale Properties said the owners were forced to close after the F1 left town.

“There have been a few closures on the street and the surrounding area, I think in large part just due to what’s been a very weak year in general,” Costa said.

“Would the Grand Prix have saved a few more? It probably would have saved the Emporium for sure but . . . I don’t know if it would have been enough to save some of the other ones that have unfortunately fallen over the last year.”

The last Grand Prix in 2008 drew a record crowd of 121,000 spectators. Another 300,000 people in 144 countries tuned in via TV.